Consider labour hired for $18 per hour.If the last hour of labour hired produces 8 units of output which sells for $10 per unit,________ labour should be hired in this situation since the wage is ________ MRP.
A)more; greater than
B)more; less than
C)less; greater than
D)less; less than
E)no; equal to

Question

Quizplus · Accepted Answer

The marginal revenue product (MRP) of the last hour of labor is 8 units * $10 = $80. Since the wage is $18, which is less than the MRP of $80, more labor should be hired.

Consider Labour Hired for $18 Per Hour